Oil companies react to Germans′ distrust of E10 fuel | Business| Economy and finance news from a German perspective | DW | 31.03.2011
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Oil companies react to Germans' distrust of E10 fuel

Fuel containing 10 percent ethanol has been on the German market for four months now, but many drivers are still unwilling to buy it. Fuel companies are struggling to balance consumer demands with government regulations.

An E 10 filling pump

Many Germans are staying away from the E10 biofuel

Oil companies have made substantial investments refitting refineries and gas stations to handle E10 biofuel in line with government requirements, but German customers are still reluctant to buy petrol with a 10 percent ethanol content for fear it may damage their cars' engines.

Dutch oil and gas company Shell is trying to boost acceptance by offering a free insurance plan that protects customers in the event that E10 fuel damages their car.

A man inspects a car engine

Many people are unsure whether E10 fuel will damage their cars

The insurance plan is free, but it comes with many caveats. The insured car needs to be certified as E-10 compatible; drivers need to buy at least 80 percent of their fuel from Shell stations; and if engine problems do arise, the driver has to prove the damage is linked to the use of biofuel.

Experts estimate that about 7 percent of German cars are unable to run on E10 fuel. But a much larger proportion of consumers have chosen to shun the biofuel, despite reassurances from politicians, carmakers and the fuel industry. Even the German federal police service has decided against using E10 fuel in its cars in case part of its fleet is damaged.

Klaus Picard, director at the German Petroleum Industry Association, warned of "temporary supply shortfalls" for the old super fuel. Even though a liter of E10 is about 10 cents cheaper at most gas stations, consumers are choosing what appears to them to be the safer option: regular super fuel, which only has a maximum of 5 percent bioethanol content.

Esso increases confusion over fuel types

bioethanol production

Cane sugar, wheat and corn can be used to make bioethanol

One glitch in a series of problems for E10 emerged when the German consumer protection agency announced that at many Esso gas stations in the state of North Rhine-Westphalia were selling regular super though pumps marked 'E10.'

According to a spokesperson for Esso, refineries and repositories were not able to provide E10 fuel as planned. At the same time, some service stations did not re-label their pumps accordingly.

Given that E10 is only defined as containing a maximum of 10 percent ethanol, with no minimum requirement, the spokesperson said Esso did not do anything wrong.

"Deceiving customers is another nail in E10’s coffin," said Klaus Müller, director of the North Rhine-Westphalian consumer protection agency.

Esso’s problems are an exception. Most gas stations are grappling with shortages of super fuel as they try to balance consumer preferences with the government's push to establish E10 fuel on the market using quotas.

BP and Total revert to super

Oil companies BP and Total have responded to the slow demand for E10 fuel by once again stocking more super and less E10 at their gas stations. Three refineries have already adjusted their production to deliver more regular super fuel.

BP gas station

BP is ignoring government targets and increasing premium fuel production again

The move puts BP and Total at loggerheads with German and EU authorities, who demand that more 'green' fuels be used throughout the bloc. The German government has even ruled that E10 should become the primary fuel sold at gas stations. If petroleum companies do not meet the sales quota for fuels from renewable sources, they may be forced to pay fines.

Nonetheless, there is no law that forces gas stations to offer E10 fuel. The German Automobile Association (ADAC) indicates that the same quota was already in place in 2010, before the introduction of E10 fuel. Even then, oil companies were able to meet the quota, which requires that 6.25 percent of all fuel sold must come from renewable sources.

Author: Annika Reinert

Editor: Sam Edmonds

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